Bank of Baroda saw its FCNR-B deposits grow sixfold to ₹1.03 lakh crore by September 2026, driven by its 'BOB Legend' product. Alongside, the bank reported a 35.8% rise in Q2 FY27 net profit to ₹6,532 crore. While deposits expanded across global and domestic segments, the decline in the CASA ratio suggests that customers are increasingly preferring term deposits, a trend that may influence the bank's future cost of funds.
Bank of Baroda has seen a significant shift in its deposit profile, with Foreign Currency Non-Resident (FCNR-B) deposits surging to ₹1.03 lakh crore by the end of September 2026. This represents a nearly sixfold increase from the ₹17,870 crore recorded in the same period a year ago. The bank attributed a major share of this growth—amounting to ₹77,270 crore—to its specialized 'BOB Legend' product offering, which appears to have successfully attracted NRI interest.
Alongside this surge in foreign currency holdings, the bank’s broader balance sheet maintained steady momentum. Global deposits grew by 16.4% on a year-on-year basis to reach ₹17.45 lakh crore, while domestic deposits rose by 16.6% to ₹14.84 lakh crore. Within the domestic segment, term deposits showed clear strength, expanding by 20.5% year-on-year to ₹9.44 lakh crore. This trend indicates that depositors are favoring fixed-return instruments over more liquid accounts.
This growth in business scale translated into a robust financial performance. For the second quarter of the 2027 fiscal year, Bank of Baroda reported a standalone net profit of ₹6,532 crore. This is a 35.8% increase compared to the ₹4,809 crore reported in the same quarter of the previous fiscal year, demonstrating the bank's ability to maintain profitability despite shifts in the interest rate environment.
However, the preference for term deposits has had a visible impact on the bank’s CASA (Current Account and Savings Account) ratio, which serves as a measure of low-cost funds. The domestic CASA ratio slipped to 36.37% from 38.42% in the previous year. For investors, the CASA ratio is a critical monitorable because a lower ratio implies that the bank must rely on higher-cost term deposits to fund its lending activities. While the current growth in overall deposits supports expansion, the challenge for the bank will be to manage the cost of these funds to protect profit margins in the coming quarters.
Moving forward, shareholders may watch for updates on whether the bank can stabilize its CASA ratio or if the shift toward term deposits continues to put pressure on the cost of funds. Additionally, management commentary on the sustainability of the 'BOB Legend' product's success and its impact on the bank's net interest margins will be key points of interest during future earnings discussions.